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Energy Transfer delays Mariner East 2 start up to 3Q, income nearly doubles

HOUSTON, May 10, 2018 (PCW) –- Energy Transfer Partners on Thursday said its 275,000 b/d Mariner East 2 pipeline in Appalachia is now expected to come online in the third quarter.

The pipeline – which has come under fire for environmental infringements that has resulted in several construction halts – was originally meant to come online last year. Its last targeted in-service date was late 2Q. The emergence of sinkholes in construction areas that exposed the older, 70,000 b/d Mariner East 1 pipeline and mud spills along ME2’s construction route has touched off vehement protests from residents and local government officials.

The Mariner East system moves NGLs – only ethane and propane currently – from Appalachian production fields to the Marcus Hook complex. It was shut down in March and only restarted last week, after safety investigations and integrity testing. The stoppage effectively halted ethane exports from Marcus Hook and severely stalled LPG exports, as shippers turned to rail and truck to move their products to the terminal. Mariner East 2 will move other NGLs and refined products to Marcus Hook.

In an earnings call on Thursday, ETP executives said that ME2’s mainline construction is 98% complete with 93% of horizontal directional drills either complete or underway. The twin Mariner East 2X pipe is expected to come online in mid-2019, executives said.

At Mont Belvieu, ETP’s 120,000 b/d Fractionator V is on track to begin service in 3Q along with its associated 3 million barrel Y-grade storage cavern. The 120,000 b/d Fractionator VI has an expected in-service date of 2Q 2019.

ETP reported 1Q net income of $879 million, up from $393 million seen in 1Q 2017. The uptick was due to increased operating income and pre-tax gains on repurchased subsidiary units.

NGL transportation volumes increased primarily from the Permian region, Mariner West and Mariner South pipelines, but was partially offset by decreased throughput volumes on Mariner East I due to the March shutdown. NGL and refined products terminal volumes decreased primarily due to the sale of a refined product marketing terminal in April 2017, lower volumes loaded for export at the Nederland terminal and lower throughput volumes at Marcus Hook due to system downtime on the Mariner East 1. Average fractionated volumes at Mont Belvieu increased 11% due to increased volumes from Permian producers. -- Samantha Hartke

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